## Facts

- Sixteen-year-old Delbert Joseph Muse III (“Joe”) was admitted to a psychiatric hospital on June 12, 1986, for depression and suicidal thoughts.
- During hospitalization, Joe experienced major depression, auditory hallucinations, and suicidal and homicidal thoughts.
- Joe was treated by psychiatrist Dr. L. Jarrett Barnhill, Jr., along with other clinical staff.
- Joe’s insurance coverage was set to expire on July 12, 1986.
- As insurance expiration approached, Dr. Barnhill ordered a blood test to determine proper medication dosage; the test was scheduled for July 13, after the coverage ended.
- Dr. Barnhill asked that Joe remain hospitalized a few additional days; Joe’s parents agreed to pay and executed a promissory note.
- The hospital discharged Joe on July 14, 1986, before the blood-test results returned on July 15.
- Evidence conflicted on Joe’s stability at discharge; there was evidence he remained seriously ill and suicidal.
- Dr. Barnhill referred Joe for outpatient follow-up care.
- On July 31, 1986, Joe died by suicide from an overdose of prescribed medication.
- The estate administrator and Joe’s mother sued the hospital and its parent corporation for wrongful death, alleging a policy or practice of discharging patients when insurance expired, overriding medical judgment and causing a premature discharge.

## Issues

1. Whether a hospital owes a duty not to adopt or enforce a policy or practice requiring discharge upon insurance expiration when it interferes with the treating physician’s medical judgment.
2. Whether the evidence permitted findings of breach and proximate cause supporting compensatory liability for wrongful death.
3. Whether a finding of parents’ contributory negligence barred recovery, and whether willful or wanton conduct by the hospital avoided that bar.
4. Whether the punitive damages awards against the hospital and parent corporation were legally sustainable.

## Decision

- The court recognized a hospital duty not to maintain or enforce discharge policies tied to insurance expiration that interfere with a physician’s medical judgment.
- The court affirmed the jury’s determination that the hospital’s policy or practice interfered with Dr. Barnhill’s judgment and that the resulting discharge proximately caused Joe’s death.
- The court upheld compensatory damages against the hospital.
- Although the evidence supported a finding of willful or wanton conduct, the court reversed the punitive damages awards and remanded for further proceedings.

## Legal Principles

- Hospitals owe patients an institutional duty of care that includes complying with physicians’ orders and making reasonable efforts to monitor and oversee prescribed treatment.
- A hospital breaches its duty when it adopts or applies administrative or financial policies that require discharge contrary to the treating physician’s medical judgment, including policies keyed to insurance expiration.
- In North Carolina, contributory negligence does not bar recovery where the defendant’s conduct is found willful or wanton.
- Punitive damages require compliance with governing standards for submission and assessment; a finding of willful or wanton conduct does not, by itself, guarantee affirmance of a punitive award on appeal.

## Conclusion

The court held that a hospital may be liable for negligence when it enforces an insurance-expiration discharge policy that overrides a treating physician’s medical judgment and results in harm, affirming compensatory liability while reversing and remanding punitive damages.


Muse v. Charter Hosp. of Winston-Salem, Inc., 117 N.C. App. 468, 452 S.E.2d 589 (1995)